New Zealand Superannuation

Revised 26th April 2000

In excess of 470,000 persons are entitled to receive New Zealand Superannuation either as married couple or as a single entitlement .

It is an age related entitlement paid fortnightly and generally appears in the bank account to be available on every second Tuesday . The whole concept of New Zealand Superannuation is based on payment to married couples where both by age qualify , with all other payments to the elderly not qualifying similarly being based on this amount.

We are receiving an increasing number of inquiries about payments to other than the married couples - below are some details which we hope will be of interest as they cover more than the combined married rate.

An index of topics: New Zealand Superannuation (both partners entitled
: Table of Married fortnightly rates
: New Zealand Superannuation (single person
: New Zealand Superannuation ( one partner entitled
: 55+ benefit
: Transitional Retirement benefit
: Community Services Card

New Zealand Superannuation (both partners entitled ).

Entitlement to New Zealand Superannuation is based on individual age qualification and each person in a married couple must qualify individually to receive New Zealand Superannuation.

Currently the combined married rate is $406.00 nett at the M rate of tax per payment ,with the payment being made to banks of the Superannuitants choice .

By the legislation in Section 13A of the Social Welfare Transitional Provisions Act 1990 the New Zealand Superannuation is adjusted annually - this section 13A states that the CPI adjustments to New Zealand Superannuation rates must take place on 1 April each year .

At this date the relationship with wages must also be checked at this time to ensure relativity with average wage levels .In an attempt to remove superannuation from being a political consideration an Accord was agreed. The after tax weekly rate of New Zealand Superannuation for a couple under the Accord which was agreed , among the then major political parties in August 1993 was set to be not less than 65% nor more than 72.5% of the net average after tax ordinary time weekly wage.

The National government at the end of 1998 , claiming the effects of the Asian crisis legislated to change the range to not less than 60% nor more than 72.5% of the NAATOTWW, so that in the year beginning 1st April 1999 the relativity fell to 62.08% .

On April 1st 2000 the incoming new government honoured an election pledge to restore the NZS to within the range set by the defunct Accord . They announced that the new rate would be $347.00 per week for a married couple which is in fact about 67% of the NAATOTWW calculated on the previous basis .

We make comment , in the next section , on the change to the way the NAATOTWW is calculated after November 1999 . November being the reference month used to calculate the adjustment in the following April.

Once the new married person rate is determined to be still within the specified band the single rates are determined .
The single rates are calculated so that the sharing rate is equivalent to 60% and the single living alone rate equivalent to 65% of the combined married rate.

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Table of nett CMR over past six years

In the table below which shows the relative figures over the past six years ,

CMR is the combined married rate ,
NAATOTWW is the Net Average After Tax Ordinary Time Weekly Wage as calculated by New Zealand Statistics in November of the preceding year .
the % is the relationship between the CMR and the NAATOTWW
the CPI is the Cost Price Index


 Date	     Nett CMR	NAATOTWW	  %		CPI
01.04.94     $295.96	$421.07		70.29		1.39%
01.04.95     $304.96	$433.59		70.17		2.80%
01.04.96     $313.12	$445.79		70.24		2.92%
01.04.97     $321.22	$478.00		67.20		2.55%
01.04.98     $323.88	$491.03		65.96		0.83%
01.04.99     $325.58	$524.45		62.08		0.52%
01.04.00     $347.00

The table above is incomplete because Statistics NZ has changed the basis of the Quarterly Employment Survey (QES) from which the NAATOTWW is calculated. The QES now includes more samples of lower rates of pay. Had the incoming government adhered strictly to its promise to restore the lower end of the range to 65% based on the current calculation for NAATOTWW because it is a lower figure the range could have been restored and the rate increased by a minor amount as dictated by the CPI.

The public and indeed the politicians forming the new government were unaware of the change to the calculation of the QES , presumably done at the bequest of the then government.

The calculation of the NAATOTWW on 1st April 1999 was based on a QES at November 1998 of $653.56 and the value of the new QES calculation at November 1999 was $641.81 , below that of November 1998.

With the critical figure of the average wage calculated in November any adjustment to the New Zealand Superannuation is always six months behind . Currently superannuation payments are no longer subject to the surcharge regime as the superannuation surcharge was abolished from 1 April 1998.

Individuals in receipt of New Zealand Superannuation continue to be paid New Zealand Superannuation in respect of the first 26 weeks of absence from New Zealand , provided that the total period of absence does not exceed 30 weeks.
Absence from New Zealand beyond 30 weeks will generally result in loss of entitlement of New Zealand Superannuation for the full period spent outside of New Zealand.

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New Zealand Superannuation (single person ).

The single rate for New Zealand Superannuation is calculated so that the sharing rate is equivalent to 60% of the combined married rate and the single living alone equivalent to 65% of the combined married rate.

Currently the payment per week is

Single Sharing $243.60 nett
Single Living Alone , $263.90 nett

- these rates at M tax rate

The living alone payment is designed to assist Superannuitants who are living on their own on the basis that it is more expensive for someone living on their own compared to a sharing situation .

For a single person living alone there is no income or asset test- the sole criteria for receiving a Living Alone Payment is that you are living on your own.
For a married person living alone there are however some criteria that must be met as follows :
- if your partners New Zealand Superannuation has been reduced to the hospital rate there is no income or asset test ,
- or if your partner is receiving a Residential Care Subsidy an income and asset test has already been completed
- or if you are receiving payment of New Zealand Superannuation as a non-qualified spouse ( i.e. you do not qualify for New Zealand Superannuation in your own right) and you were included in your partner's New Zealand Superannuation prior to 1 October 1991,
- otherwise you do not qualify for a living alone allowance .

For people receiving the living alone allowance you can have someone come to stay for a holiday for up to 13 weeks (in any 26 week period ) and continue to receive your Living Alone Payment . Holidays overseas have same restrictions as for married Superannuitants above.

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New Zealand Superannuation (one partner entitled ).

The non-qualified spouse rate of New Zealand Superannuation is designed for couples where one spouse is qualified by age and the other is below the qualifying age for New Zealand Superannuation .
According to the rationale for this distinction , it would be unfair to pay a couple in which one spouse is non-qualified exactly the same amount of superannuation as a couple where both qualify in their own right as when couples have a wide age difference it could result in some people qualifying for New Zealand Superannuation when they are their thirties or forties .
In the case where one spouse is not qualified the couple has two options .

The first option allows the married couple with non qualified partner to receive the ' non-qualified spouse included ' married couple rate of New Zealand Superannuation , currently $390.80 gross per week .
This is subject to the social security income test where joint income abates after $80 per week by 70 cents in the dollar and the total amount of any private pensions are include in the income .
Thus the maximum of $4016 per annum additional income may be received before the amount paid for 'non-qualified spouse included ' is affected .
The second option allows the qualified partner to receive the married rate of New Zealand Superannuation , currently $203.00 nett .
For joint extra income over $16000 this option is probably applicable but what option is selected is based on individual situations..
For income calculation only 50% of private pension is treated as income.

Where a person is in receipt of a pension registered under the Superannuation Schemes Act 1989 , or an annuity from a life insurance policy , 50% of the amount received under the pension or annuity may be disregarded as income in assessing entitlement to benefits or pensions , subject to all of the following conditions being met.

that person commenced receiving payments of the pension or annuity prior to April 1 1992 ; and
at that date , the person was aged not less than 55 years and not more than 59 years ; and
that person's spouse ( if any) who is younger than the person whose income is being determined , was aged 55 years or more at the date that person started to receive payments.

While the Federation is attempting to resolve the perceived iniquities in the situation of Superannuitants with non qualifying spouse there is a specific group outside the Federation established with the aims to remove the abatement for the qualifying person , to minimise the penalties for non-qualifying person once 60 is reached and to exclude private pensions from income assessment .
The group may be contacted - Superannuation & Abatement Group , c/o 21 Reese Jones Grove , Maungariki , Lower Hutt.

With many of our members not being Superannuitants but in the 55+ category it is pertinent here to give some details of the allowances that apply to these , to complete the picture of the social welfare regime that covers our members , especially as current managerial practices tend to consider anyone over 40 as old and therefore in the words of the Treasury " a redundant economic unit ".

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55+ Benefit . Now called the Community Wage

. The 55+ benefit is essentially a form of unemployment Benefit and is available to those who meet the criteria. . It is expected that those applying for the benefit will register with the employment service for at least the first six months of benefit receipt but after that time can choose to let that registration lapse .
They are , however , required to continue to be available for , and seek , work . The benefit payment is set below the New Zealand Superannuation on the rationale that the usual age of retirement is now considered to be 65 years , and those people below that age should continue to be encouraged to seek work .
Applicants for the 55+ benefit are subject to an income test and a stand-down period .- the income test is to determine if the applicant has presently enough income to live on.
The current rates payable per week are married $291.44 gross , $247.72 nett and
single $174.87 gross , $148.64 nett :
these amounts are income tested in that $80 per week may be earned before an abatement regime of 70 cents in the dollar applies

Individuals who have a period of absence from New Zealand cease to receive the benefit when overseas the exception being where for a four week absence the purpose of the travel is to attend a job interview or to follow up definite job prospects .
Also 55+ beneficiaries may now travel overseas and continue to receive payment for up to four weeks if the travel is for humanitarian reasons, each case being decided on its merits.

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Community Service Card .

A Community service card means you pay less for health care and is also a criteria for free home based support services provide by the regional office of the Health Funding Authority .
It gives you higher subsidies on prescriptions and visits to your family doctor . If you qualify you ( and your partner ) will each get a card.

Subsidy for each doctors visit $3 .
Maximum Government prescription charge is $3 per item , but you still have to pay the premium if there is one . A premium is charged if the manufacturer's cost is more than the Government's subsidy but Doctors can prescribe similar items that dont have a premium.

To get a Community Services Card you must have a low or middle income or in receipt of one of the main types of income support . New Zealand Superannuitants on low income can apply. The limits of income are as follows .

Single living with others $20,918.00
Single living alone $22,157.00
Couple no children $33,083.00 Three person family $47.085.00
Four person family $53,138.00
Five person family $59,050.00
Six person family $65,743.00

To obtain further information and to obtain an application form ring toll free 0800 999 999.or
write to National Community Services Card Centre , PO Box 5054 , Wellington or if deaf or find it hard to communicate by phone , fax Deaf Link free-fax 0800 621 621

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